9475 CONTINUES TO BE IMMEDIATE HURDLE; 9104 IMMEDIATE SUPPORT

9475 CONTINUES TO BE IMMEDIATE HURDLE; 9104 IMMEDIATE SUPPORT

WORLD MARKETS

US indices soared 1.6%-1.9% on Friday despite dismal monthly jobs report on signs that relations between US and China are warming and on hope that the worst of the coronavirus and its impact on the economy has passed.

A record 20.5 million jobs were lost last month, while unemployment rate jumped to 14.7% from 4.4%. Both the numbers are post-World War II records. However, market expected 21.5 million job losses and unemployment rate of 16%.

U.S. and Chinese trade representatives agreed to strengthen their cooperation in implementing the “phase 1” trade deal.

Apple said it will reopen stores starting next week, with temperature checks and a limited number of customers in the location at one time.

WTI crude gained $1.2, or 5%, to settle at $24.74 per barrel, while Brent crude gained $1.51 to settle at $30.97 per barrel.

European markets rose 1.1%-1.4%. German exports plunged 12% in March, a much sharper drop than expected, and marking the steepest drop since records began in 1990.

For the week, US indices gained 2.6%-6%, breaking two-week losing streak. Oil rose for the second consecutive week.

AT HOME

After gaining nearly 2% at the open, benchmark indices gave away most of these gains through the session to end higher by just 0.6%. Sensex settled at 31642, up 199 points while Nifty added 52 points to finish at 9251. BSE mid-cap index ended flat while small-cap index lost 0.4%. BSE Energy and FMCG indices gained 2.6% and 1.9% respectively, becoming top gainers among the sectoral indices while Power and Utilities indices were the top losers, down 2.4% and 1.8% respectively.

FIIs net bought stocks and index futures worth Rs 1725 cr and 329 cr respectively but net sold stock futures worth Rs 1530 cr. DIIs were net sellers to the tune of Rs 1503 cr.

Rupee appreciated 22 paise to end at 75.54/$.

ICICI Bank reported mixed set of numbers. Gross NPA ratio, at 5.35%, improved from 5.95% q-o-q and hit 17 quarter low. Slippages remained elevated at Rs 5306 cr, up 21.6% qoq. Watchlist addition remained elevated at Rs 2288 cr however watchlist declined to 2.58% of the book from 2.74%.  Net interest margin, at 3.87%, was best ever. PAT was lower than expected due to higher provisions.

For the week, Sensex and Nifty plunged 6.2% each, suffering the worst fall since the week ended 3rd April 2020.

OUTLOOK

U.K. Prime Minister Boris Johnson outlined over the weekend a “conditional plan” to slowly reopen society and the economy. Disney is also set to reopen its Disneyland theme park in Shanghai today. Meanwhile, U.S. Treasury Secretary Mnuchin warned that the jobless numbers could “get worse before they get better.”

Today morning, Asian markets are trading with gains of 0.5%-2.1% and SGX Nifty is suggesting around 120 points higher start for our market.

In Friday's report we had reiterated the view that 9104, the 33% retracement level of the entire 7511-9889 upmove, continued to be immediate support while 9475  continues to be immediate hurdle on the hourly chart, a crossover of which was required for a fresh upmove.

Nifty, after touching a high of 9382 in the initial trade, slipped to end at 9251 but is set to open near 9350 today.

9475 continues to be immediate hurdle on the hourly chart, a crossover of which is required for a fresh upmove. If that happens, 9533-9731, the gap created by last Monday’s gap down opening, would be the next resistance zone.

9104, the 33% retracement level of the entire 7511-9889 upmove, continues to be immediate support. IF 9104 gives way, 8909, the bottom made on 21st April, would be the next important support.